FA C08-09 Liabilities (Suppliers, Salaries, Taxes)

8/12/2019 FA C08-09 Liabilities (Suppliers, Salaries, Taxes)

1/49

1

Financial Accounting

Prof. Adriana Tiron Tudor - course

Lect. Szilveszter Fekete - practice

att

Agenda course 08-09

1. Objectives

2. Liabilities definition and classification

3. Commercial liabilities

4. Salaries

5. VAT, taxes, others


2/49

2

Explain a current liability and identify the majortypes of current liabilities.

Describe the accounting for notes payable.

Explain the accounting for other current liabilities.

Identify the types of bonds.

1. Objectives

After studying this chapter, you will be able to:

Identify the requirements for the financialstatement presentation and analysis ofliabilities.

1. Objectives

That their weight in the balance sheet variesaccording to the firms activity


3/49

3

Liabilities are..

Creditors claims on total assets

Existing debts and obligations

Liabilities must be settled in the

future by transfer of assets orservices.

Current Liabilities

Can reasonably be expected to paid

From existing current assets or through

the creation of other current liabilities.Within 1 year or the operating cycle,

whichever is longer.

Debts that do not meet both

criteria are Long-Term Liabilities.


4/49

4

The liabilities represent the financingresources of the economic goods.

The liabilities are financial resourcesobtained from the owners and the thirdparties or resources created by the

enterprise from the developed activity(through auto-financing).

The classification of the patrimonialliabilities is made depending on two

criteria:

The constitution manner (nature andprovenience);

Their due date (the reimbursement periodunder or over a year)


5/49

5

Types of Current Liabilities

Notes Payable

Accounts Payable

Unearned revenue

Accrued Liabilities

Taxes

Salaries and Wages Interest



6/49

6


Notes Payable are...

Obligations in the form of written notes.

Often used instead of accounts payable - theygive written documentation if needed for legalremedies.

Used for short-term and long-term financingneeds.


7/49

7

Sales Taxes Payable...

Are collected fromcustomers.

Are expressed as a % ofsales price.

Are required by law.

Must be sent to state often.

Are often rung separatelyfrom sales on the cashregister.

Journal

Mar 25 Cash 12,400

Sales 10,000

Sales Taxes Payable (VAT) 2,400

(To record daily sales andsales taxes)


8/49

8

Sales Taxes...

When sales taxes are not rung upseparately, total receipts are divided by100% plus the sales taxes percentage.

Total Receipts

100% + 24%

12,400 = $10,000 Sales

1.24

Sales Taxes...

$10,000 x 2.4 = $ 2.400 VAT

Mar 25 Cash 12,400

Sales 10,000

VAT 2.400

(To record daily sales and VAT)

Journal


9/49

9

VATs accounting

Concept VAT is an indirect tax owed to the state budget.

Area of appliance In VATs area of appliance are comprised operation whichcumulatively fulfill the next conditions:

Are a goods delivery or services providence with payment;

The place of goods delivery or service providence is considered to be inRomania;

The delivery of goods and the service providence is realized by a taxableperson;

The delivery of goods and the service providence must result from aneconomic activity

VATs accounting

Taxable systems

The taxable operation between the appliance area of the VAT are classifiedfrom the taxable point of view as follows:

A. Taxable operationsfor which the standard (or reduced) quota is applied;

B. Exempted operations with reimbursement right, for which VAT is not

owed, but is the reimbursement of the owed or paid VAT, for boughtgoods and services is allowed.

C. Exempted operations without reimbursement right, for which VAT is notowed, and the reimbursement of owed or paid VAT for bought goods andservices it is not allowed .


10/49

10

VATs accounting

The organizing of the operative evidence of VAT, means making thenext documents:

VATs registration declaration / other peoples mention declaration

Buying journal

Selling journal

Selling register (incomings)

Register containing the assimilated operations of the delivery of goods andservices

VAT reimbursement

Reimbursement demand

Compensation demand

VATs accounting

The synthetic accounting of VAT in realized with the account 442 VAT,detailed on the next 2nd degree accounts:

4423 VAT payable;

4424 VAT receivable ;

4426 Input VAT;

4427 Output VAT; 4428 non-chargeable VAT


11/49

11

VATs accounting

The accounting and fiscal mechanism of VAT assumes

Recording the output VAT sat on the domestic sales (exclusiveintracommunitary deliveries and exports ):

=account 4427 output VAT (P)=

The standard accounting formula:

Receivables (usually)= % X

41x Customer and similar accounts

Or

462 Sundry creditors Incomes(usually) X1

70x Net turnover

75x Other operative incomes

4427 Output VAT x2

VATs accounting

The accounting and fiscal mechanism of VAT assumes

Recording the input VAT sat on buying (including intracommunitaryacquisition and imports ):

=account 4426 input VAT(A)=

The standard accounting formula:

% =debts (usually) X40x suppliers and similar accounts

or

461 Sundry debtors

Buyings (usually) X1

2xx Assets

3xx Inventories

6xx Expenses

4426 Input VAT X2


12/49

12

VATs accounting

Registering the VAT collectible at reimbursement which can be concretized in :

Net fiscal debt from VAT, if : Rc4427>Rd4426

account 4423 VAT payable (P)

The standard accounting formula :

4427 = % Rc4427

4426 Rd4426

4423 Rc4427-Rd4426

In the net fiscal receivable from VAT, if : Rc4427


13/49

13

VATs accounting

3) Registering the evidence discharge:

711 variation in inventory=345 finished products 23.000

4) Registering the VAT regularization at the end of the month:

4427output VAT= % 7.200

4426 input VAT 4.800

4423 VAT payable 2.400

5)Registering the payment of the owed VAT through order bill:

4423 VAT payable = 5121 cash at bank 3.500

6)Registering the expenses with affiliated delay increases:

(computing the increase: 2.100 x 0.1%/day x 30days = 63 lei )

6581compensations ,fines and penalties=4481other debts payable to the

treasury 637)Registering the affiliated delay increases payment with order bill through

bank

4481 other debts payable to the treasury=5121cash at bank 63

Regularization of the VAT

Output VAT > input VAT => payable VAT

Output VAT< input VAT => receiv VAT


14/49

14

A. At the end of the period output VAT is8.000, input VAT is 2.000.

B. At the end of the period output VAT is5.000, input VAT is 6.000

GENERAL JOURNAL

NoEcOp

Noaccop

Explanation CorrespondingAccounts

SUMS

D C

A Regularization ofthe VAT

4427 = %

Output VAT 4426 Input VAT

4423 VAT payable

8.000

2.000

6.000

B Regularization ofthe VAT

% = 4426 Input VAT

4427 Output VAT

4424 VAT receivable

5.000

1.000

6.000


15/49

15

transaction Supplier acc. Client acc.

Commercial

1.goods,service transfer

2.payment in a short per.

411 A 401,404 P

Credit

1.goods,service transfer

2.bills of exchange

3.payment after a per.

411 A

413 A

401 P

403,405 P

Advance

1. payment

2. goods,service transfer

419 P 409 A

232,234 A

Without invoice 418,4428 408,4428

7. An advance payment from the customers is collected in sum of 500 lei.8. An advance is paid to the row materials supplier, in sum of 500 lei, fromthe bank account.9. An advance payment is acquitted to a truck supplier from the bankaccount, in sum of 3.000 lei.10. The truck producer collect an advance from a client 3.000 lei

7 1 Advance paymentcollected

5121 = 419Cash at bank in lei Advance

payments

500 500

8 1 Advance payment

acquitted

4091 = 5121Suppliers - debtors Cash at bank in lei

500 500

9 1 Advance paymentacquitted

232 = 5121 3.000 3.000

10 1 Advance paymentcollected

5121= 419 3.000 3.000


16/49

16

Salaries and social reimbursements

The accounting of salary and socialreimbursements

The employer payment obligations to the insurance and social securityorganisms are composed by:

1. The employers own contributions;

2. The employees contributions, retained from their salary rights throughdeductions at source, in the base of a legal letter of attorney

The reimbursement (payment) by the employer of his own contribuitons andretained by deduction at source, the beneficiary insurance and socialsecurity organisms

Documents regarding the salaries evidence

Documents related to the attendance an work and the volume of workdone

Documents related to the production obtained

Documents related to salaries setting

Documents regarding the employees nominal evidence, their salariesand the taxes


17/49

17

Current accounting of socialreimbursements

The operative evidence and the analytic accounting of salaries reimbursement are beingrealized with the help of the pay sheets in which the computing elements of the salaryrights and their reimbursement are systemized as follows:

A. Base gross salary

(+A1) Payroll increases

(+A2) Running allowances

(+A3) Wages indexation (for prices increases)

(+A4) Wages in kind

(+A5) Other salary rights

B. (=) Total gross salary rights

(-B1) Personnel contribution to social security insurances;

(-B2) Employees contribution for health social insurances ;

(-B3) Personnel contribution to unemployment fund;

(-B4) Salary tax(-B5) Deductions in favor of third parties;

(-B6) Deductions in favor of the entity;

(-B7) Advances for the employees

C. (=) Total payment of net salary rights

Current accounting of socialreimbursements

NOTE:

B Computing formula for salary tax is : B-B1-B2-B2

n (-Dp) Personal deduction

n (-Cs) Union contribution

n (-Cf) Contribution to private pension without the overdraft of the equivalent

in ron of 200 eurov (=) Total taxable salary rights (taxable income)


18/49

18

Salaries

Employers expenses 6 = 4

Payroll deductions 4= 4

Taxes payment 4= 5

net salary payment 4 = 5

The synthetic accounting of thereimbursement with the employees

Used accounts:

Group 42 Payroll and similar accounts. This group includes the next 1st

degree accounts:

421 Employees-salaries payable;

423 Other social benefits granted to employees;

424 Profit share payable to employees; 425 Advances to employees;

426 Employee rights not paid;

427 Retentions from salaries payable to third parties;

428 Other employee related debts and receivables ;


19/49

19

The synthetic accounting of socialreimbursements

Is being registered in the accounts:

- 431 Social security which is elaborated on the next 2nd degree accounts:

4311 Company contribution to social security

4312 Employee contribution to social security

4313 Company contribution to health insurance

4314 Employee contribution to health insurance

-437 Unemployment fund which is elaborated on the next 2nd degreeaccounts:

4371 Company contribution to unemployment fund

4372 Employee contribution to unemployment fund

- 438 Other employee related social debts and receivables which iselaborated on the next 2nd degree accounts:

4381 Other employee related social debts

4382 Other employee related social receivables

- 444 Tax on salaries

Accounting registering of the salaryreimbursements

The employees contribution at the insurance and social security organisms are beingcomposed by, mainly from:

CAS The entitys contribution to social insurances;

CASS The employers contribution to health social insurances;

CFS The entitys contribution to unemployment fund;

The bookkeeping of the employers contribution to insurance and social security

organisms implies:1. The recording of pay obligations:

6451 = 4311 (CAS)

6453 = 4313 (CASS)

6452 = 4371 (CFS)

2. Contributions paid through bank tranfer:

% = 5121

4311 ( CAS )

4313 ( CASS )

4371 ( CFS )


20/49

20

Payroll Deductions

Payroll Taxes...

Amount required by law to be withheld fromemployees gross pay.

Social Security taxes withheld

income taxes


21/49

21


1. Granting of salary incomes through bank tranfer:

425=5121 (B7)

2. Registering the gross salary rights:

641=421 (B)

3. Registering of salary retainings:

421= %

4312 (B1)

4314 (B2)

4372 (B3)

444 (B4)

427 (B5)

4282 (B6)

425 (B7)


4. Payment of net salary right:

421=5121 (C)

5. Payment of the deductions from the salary rights through bank transfer:

% = 5121

4312 (B1)

4314 (B2)4372 (B3)

444 (B4)

427 (B5)

NOTE:

If, with the reimbursement of the net salary rights there are non-reimbursedsums, this are being recorded in a separate evidence, with the formula:

421=426

% = 51214312 (B1)4314 (B2)4372 (B3)444 (B4)427 (B5)


22/49

22

Salaries

1.The expenses of the employer withemployees are:

Comp Contrib Social Sec 5.800 lei,

Comp Contrib HI 1.400 lei,

CCUF 400 lei,

commission TWI 150 lei,

fund for guarantee of the salary 50 lei, other funds 200 lei

Brut Salary 20.000

GENERAL JOURNAL

NoEcOp

Noaccop


SUMS

D C

1 1 CCSS registration 6451 = 4311Expenses with Company contribution

5800 5800

2 CCHI registration 6453 = 4313Expenses with Company contribution 1400 1400

3 CCUF registration 6452 = 4371Expenses with Company contribution

400 400

4 Commission TWIregistration

622 = 462Commissions Sundry creditors

150 150

5 Fund for guaranteeregistration

6458 = 4381Expenses with other Other employee.

social security...

50 50

6 Other fundsregistration

635 = 447Other taxes, Special funds taxes...

Charges and similar expenses

200 200


23/49

23

Brut salary 641= 421 20.000

Journal

2.The sum of 3.000 lei is withdrawn from the bank andadvance payments are made to the employees.

3. The salaries for the current month are recorded, sum20.000 lei, ECSS 1.900 lei, ECHI 1.300 lei, contribution tounemployment fund 200 lei, ratios and rents for thethird parties 910 lei, salary tax 3.500 lei, receivablesover the employees 1.190 lei.


24/49

24

GENERAL JOURNAL

NoEcOp

Noaccop


SUMS

D C

2 1 Cash withdrawnfrom the bank

5311 = 5121Petty cash in lei Cash at bank inlei

3000 3000

2 Advance paymentto the employees

425 = 5311Advance to Petty cash in lei

employees

3000 3000

GENERAL JOURNAL

NoEcOp

Noaccop


SUMS

D C

3 1 Registration of payroll 641 = 421Salary expenses Employees - salaries...

20000 20000

2 Registration ofsalaries contributions

421 = %

Employees - sal. 425 Advance to empl.

4312 Employee contrib.



444 Tax on salaries

427 Retention from sal.

4282 Other employee...

12.000

3000

1900

1300

200

3500

910

1190


25/49

25

4. The necessary sum is withdrawn from the bankand the second part of the salaries is paid to theemployees, except the sum of 500 lei for thepersonnel who is not in the entity.

5. The uncollected salaries are deposited to the

bank.

:

GENERAL JOURNAL

NoEcOp

Noaccop

Explanation Corresponding Accounts SUMS

D C

4 1 Cash withdrawnfrom the bank

5311 = 5121Petty cash in lei Cash at bank in lei

8000 8000

2 Salariespayment

421 = %

Employees - sal.... 5311 Petty cash in lei

426 Employee rights..

8000

7500

500

5 1 Cash deposit at

bank

5121 = 5311Cash at bank in lei Petty cash in lei

500 500


26/49

26

6.Payments for illness support are recorded in thesum of 100 lei, 60% paid by the entity, 40% by thehealth insurance, from which 20 lei are retained forrents and ratios.

7. Material illness supports are paid, uncollectedsalaries 400 lei and the rest are recorded asincomes.

GENERAL JOURNAL

NoEcOp

Noaccop


SUMS

D C

6 1 Payments forillness registration

% = 423 Other social benefits

6458 Expenses with other.

4311 Company contribution to social sec.

60

40

100

2 Rent, rations andtax on salaries

registration

423 = %

Other social ben... 444 Tax on salaries

427 Retentions from...

36

16

20

7 1 The payment of

material illnesssupports

% = 5311 Petty cash in lei

423 Other social benefits...

426 Employee rights...

64

400

464

2 Income form

salaries

426 = 7588Employee rights.. Other operating

incomes

100 100


27/49

27

8. The retaining from the salaries and the companyscontributions related to the granted salaries, as wellas other similar obligations are transferred ondestinations.

GENERAL JOURNAL

NoEcOp

Noaccop


SUMS

D C

8 1 Payment ofcontributions to the

budget

% = 5121 Cash at bank inlei

4274311

4312

4313

4314

4372

444

447

462

4371

4381

930

5760

1900

1400

1300

200

3516

200

150

400

50

15.806


28/49


29/49

29

Journal

Aug 6 Cash 500,000

Unearned Ticket Revenue 500,000

(To record sale of 10,000 tickets)

Sept 7 Unearned Ticket Revenue 100,000

Ticket Revenue 100,000

(To record ticket revenue earned)

Receivables and liabilities inforeign currency

Transaction must be expressed in theentitys reporting currency.

Exchange rate, is the rate for exchanging twocurrencies.

Exchange difference, the difference fromreporting a foreign currency in the reportingcurrency at different exchange rates.

Closing rate is the spot exchange rate atthe reporting date


30/49

30

Initial recognition

A foreign currency transaction is a transactionsdenominated in or requiring settlement in a foreigncurrency.

Recording on initial recognition of aforeign currency transaction.

Apply the exchange rate in operationat the date of the transaction

Reporting at subsequent reporting dates.

At each reporting date,

monetary items should be reported using theclosing rate.

non monetary items carried at historical costshould be reported using the exchange rate atthe date of the transaction.

non monetary items carried at fair valueuse the exchange rate that existed whenthe values were determined.


31/49

31

Recognition of exchange differences

Recognised as revenue or expenses inthe period in which they arise.

Case study

1.01.01.N Beginning bank account 1.000 Eur 3,52.01.02.N Invoice from a service supplier 100 Eur 3,43.10.02.N Invoice payment 100 Eur 3,54.12.06.N Invoice from a tangible asset supplier500 Eur 3,6

5.15.07.N Invoice payment 200 Eur 3,46.20.09.N Service invoice issued to a EU client 100 Eur 3,4

7.31.12.N Eur 3,3 disp.700, liab.300, receiv. 1008. 01.03.N+1 Invoice payment 300 Eur 3,7


32/49

32

1.Beginning bank account 1.000 Eur 3,5 (5124) 3.5002.Invoice from a service supplier 100 Eur 3,4 628 = 401 3403.Invoice payment 100 Eur 3,5 % = 5124 350

401 340665 10

4.Invoice from a tangible asset supplier 500 Eur 3,6 213 = 404 1.8005.Invoice payment 200 Eur 3,4 404 = % 720

5124 680765 40

6. Service invoice issued to a EU client 100 Eur 3,4 411 = 704 3407. At 31.12.N Eur 3,3 disp.700, 665 = 5124 160

liab.300 404 = 765 90receiv. 100 411 = 756 10

8. Invoice payment 300 Eur 3,7 % = 5124 1110404 990665 120

State budget reimbursement


33/49

33

The accounting of the state budgetreimbursement

The accounting structure of the state budget reimbursement

Profit/Income tax;

VAT;

Payroll tax;

Subsidies;

Other taxes and payments;

Special funds taxes and payments;

Other debts and receivables to the state budget;

The current accounting its assured with the accounts from group 44 Accountspayable to the budget, special funds and similar accounts

The accounting of the profit/incometax

Content: Profit tax its directly applied on the beneficiary obtained from aeconomic activity;

The profit tax payers are:

Romanian artificial persons;

Foreign artificial persons who perform activities through a permanent

establishment in Romania; Foreign artificial persons and non-resident natural persons who perform

some activity in Romania through an association without artificialpersonality;

Foreign artificial persons who realize incomes from/or in connection withimmovable properties from Romania or from selling/transferring equitysecurity kept a Romanian artificial person.

Resident natural persons associated with Romanian artificial persons inorder to realize incomes both in Romania and other countries from withoutartificial personality associations


34/49

34


The computation and determination of the profit tax is being done byfollowing the next steps:

a)Determining the accounting result, cumulated from the beginning of theyear(RCC) as follows:

RCC= total cumulated incomes-total cumulated expenses

b) Computing the taxable result, cumulated from the beginning of the year(RIC) as follows:

RIC=RCC + non-deductible fiscal expenses non-taxable incomes fiscal losses from previous years

c) Determining the owed profit tax, cumulated from the beginning of the year,until the ending of the quarter for which the computation is being done(IPC):

IPC=RIC x profit tax rated) Determining the profit tax for the quarter for which the computation is being

done (IPT):

IPT = IPC the cumulated profit tax owed at the end of the previousquarter


Income tax for micro-enterprises

Content: Income tax (Iv) is an optional tax for micro-enterprises- theRomanian artificial persons which, at 31 December the previous fiscal year,fulfilled together the following conditions:

Realized incomes, without the consulting and management ones, in abigger proportion than 50% from the total incomes;

Have from 1 to 9 inclusive employees;

Realized incomes smaller than the lei equivalent of 100.000 euro;

The social capital is fully kept by natural persons, and/or artificial of privateright

The equation for computing the income tax is :

Iv = Turnover x 2%


35/49

35


The reimbursements regarding the income/profit tax are reflected in the

account:

o 441 Profit/Income tax, which is analytically developed in 2 accounts:

Account 4411 Profit tax;

Account 4418 Income tax


Example :In the first quarter of the 200 N financial year, where recorded in theaccounting the following incomes and expenses:

Raw materials expenses : 1.000 lei

Auxiliary materials expenses: 1.200 lei

Consumables expenses: 1.500 lei

Goods expenses: 20.000 lei Advertising expenses (on written contract): 500 lei

Sponsorship expenses: 50 lei

Delay penalties expenses: 80 lei

Incomes from goods selling: 60.000 lei

Incomes from other activities: 15.000 lei

Incomes from equity security: 400 lei

Fiscal loss from the previous year: 287.54 lei


36/49

36


Determining the taxable result:

Taxable result=accounting result + fiscal non-deductible expenses non-taxable incomes

Accounting result= total incomes-total expenses = 75.400-24.330=51.070lei

Fiscal non-deductible expenses=50+80=130 lei

Non-taxable incomes=400+287.54= 687.54 lei

Computing the profit tax owed for 1st quarter: 50.512,46 lei x16%=8.081,99 lei ~ 8.082 lei

Solution:

1) Registering the profit tax owed for the 1st quarter:

691Profit tax expenses=4411Profit tax 8.082

2) Registering the payment of the owed profit tax (until 24 April 200N)withcash order:

4411Profit tax=5121cash at bank 8.082


Example: A micro-enterprise registered in the 1st quarter of year N, the nextincomes:

- Incomes from selling finished products: 20.000 lei

- Incomes from producing tangible assets: 300 lei

- Other exploitation incomes: 4.000 lei

- Interest incomes: 600 leiDetermine and register the income tax for this enterprise.

Solution:

1) Determining and registering the income tax

(20.000+4.000+600)x2%=492 lei

698 income tax and other taxes not included above=4418 income tax 492


37/49

37

The accounting of other taxes andpayments

The main taxes included in this category are: excise tax, custom taxes,gasoline tax and natural gases from internal production, dividend tax, localtaxes and other taxes.

The synthetic accounting of debts and other taxes and payments is beingrealized through account 446 other taxes, charges and similar liabilities

Example : Firm X registers in its own accounting the building tax of 1.800 lei

635 other taxes, charges and = 446.01 other taxes, charges and similar 1.800similar expenses liabilities

-analytic building tax

The contribution to special fundsaccounting

The patrimonial entities owes to some public organisms sums especiallymade with certain destinations provided by the law, which are recognizedunder the name of special funds, and this are:

1) Public health special fund;

2) Public roads special fund;

3) Promotion and tourism modernization special funds;4) Environment fund;

5) Other special funds as:

- Granting fund for salary receivables payment;

- National cultural fund;

- Energetic system developing fund, etc.


38/49

38

The contribution to special fundsaccounting

Specials funds synthetic accounting is realized through account 447specialfund taxes and similar liabilities

Example: Is recorded in accounting the entitys debt regarding the public healthfund of 1.100 lei, which is being paid later on through bank transfer.

Solution:

1)Registering the debt regarding the public health fund:

635Other taxes, charges and=447 special fund taxes and 1.100

similar expenses similar liabilities

2) Registering the debt payment with order bill through bank transfer

447 special fund taxes and = 5121 cash at bank 1.100

similar liabilities

The accounting of subsidyreceivables

Content: Subsidies, as a reimbursement relation, are receivables (receivingsums) adjudicated by the economic entities to the government ,thegovernmental agencies or other similar national and internationalinstitutions.

The current accounting of subsidy receivables

445 Subsidies

4451 Government subsidies

4452 Irredeemable loans as subsidies

4458 Other amounts received as subsidies

Whole or/and partial financing of some categories (elements) of currentexploitation expenses

Registering the receivable regarding the subsidy 445x=741x

Encashing the subsidy (through bank) 5121=445x


39/49

39

The accounting of subsidyreceivables

The whole and/or partial financing of non-current assets

Subsidy adjudication:

445x=13x

Encashing the subsidy (through bank)

5121=445x

The transfer of subsidies share at the end of the period, while using the asset:

13x=7584

Reimbursement accounting inside thegroup and with shareholders/associates

The accounting structure of the reimbursements within the group andwith the shareholders looks for:

A. Reimbursements between:

A.1. Affiliated entities;

A.2. Entities between whom there are attendance interests;

B. Reimbursements between the entity and the shareholders regarding:B.1. Owed sums to shareholders;

B.2. Reimbursements regarding the capital and the payable dividends

C. The current accounting is assured with the accounts from group

45 Group and shareholders


40/49

40

Reimbursement accounting inside the groupand with shareholders/associates

A. The reimbursements accounting between group entities

Concerns especially the granting and retaining of financial helps (with orwithout moderate interest) between the affiliated entities and/or betweenthose who have attendance interests

The accounts (451x and 453x) will have the accounting function:

o of asset at the entity as a creditor

o of liability at the entity as a debtor


Commercial entity X gives , through bank transfer a financial help of5.000.000 lei to entity Y. At the end of the financial period, the interestcomputed, but not yet reimbursed from the expirable financial period are of30.000 lei.

In the next financial period the interest are being reimbursed and 200.000 leifrom the financial help gave are refunded.

In Xs accounting In Ys accounting

In the financial year N In the financial year N

1.Giving the financial help4511 = 5121 500.000

1.Receiving the financial help5121 = 4511 500.000

2.Registering the encashing interests4518 = 766 30.000

2.Registering the paying interests666 = 4518 30.000

In the financial year N+1 In the financial year N+1

3.Partial encashing of the financial helpand the interests:5121 = % 230.000

4511 200.0004518 30.000

3.Partial payment of the financial help andthe interests:

% =5121 230.0004511 200.000

4518 30.000


41/49

41

The accounting of the reimbursementswithin the shareholders

B. The accounting of the reimbursements between the entity and shareholders

Mainly endorses:

B1. Private corporations (SNC and SCS) or joint ventures (SRL), in whichfrequently appears liquidities insufficiency temporary covered by theshareholders (with or without modicum interest).

Used accounts : 455x- with liability accounting function


A limited liability company encashes from his unique associate 50.000 lei forcurrent finances .At the end of the financial period are computed andrecorded interest of 5.000 lei. In the next financial period are acquitted incash the associates interests, together with his withdrawn of 25.000 lei.

In the financial year N

1.Encashing the sum deposited by the unique associate in cash:5311 = 4551 50.000

2.Registrating the unique associate interests:666 = 4558 5.000

3.Closing the income and expenses account regarding the interests:121 = 666 5.000

In the financial year N+1

1.The payment in cash of the interests and the sums withdrawn from the uniqueassociate

% = 5311 30.0004551 25.0004558 5000


42/49

42


B2. The reimbursements with the shareholders regarding the capital and

dividends will be presented and exemplified in the chapter AssetsAccounting

Reimbursement accounting inside thegroup and with share holder/associates

C. Reimbursement from shareholding operationsaccounting

Endorses associations in participation, without artificialpersonality, within they appear, usually, nextreimbursement relations categories:

1. Collections and refunds of sums endorsing theincorporation liquidation of floating asset's necessaryfor shareholding operations development.

2. Income and expenses transfers between co-participants to realize shareholding operation and

sums representing gross financial result between co-participants :

Accounts used: 458x


43/49

43


Between company X, with active role, and Y, passive role, shareholdingoperations accounting, are unrolled the next reimbursements:

a) Y company contribution, pulled out for X company, atassociations floating asset, summing 200.000 ron;

b) Incomes from association operations, from which, according tothe association contract, 60% X Co, and Y Co:

Goods selling incomes100.000 ron Various activities incomes....10.000 ron

c) Association operations expenses, from which, according to theassociation contract, 50% to X Co, and 50% to Y Co:

Water and electricity expenses..1.000 ron Gods expenses...60.000 ron Personnel remunerations expenses10.000 ron Social insurance contribution expenses2.333 ron Unemployment assistance contribution expenses500 ron Postal and telecommunications expenses...4000 ron Other exploiting expenses...2167 ron

Reimbursement accounting inside thegroup and with share holder/associates

In X company accounting In Y company accounting

Associations floating asset collection:

5121 = 4581 200.000

Associations floating asset payment:

4582 = 5121 200.000

Giving co-parts from the incomes (40%)

% = 4581 44.000

707 40.000708 4.000

Receiving co-parts from the incomes (40%)

4582 = % 44.000

707 40.000708 4.000

Giving co-parts from expenses (50%)

4581 = % 40.500

605 500

607 30.000

641 5.000

6451 1.166

6452 250

626 2.000

658 1.083

Receiving co-parts from expenses (50%):

% = 4582 40.500

605 500

607 30.000

641 5.000

6451 1.166

6452 250

626 2.000

658 1.083


44/49


45/49

45

Diverse creditors and debtorsreimbursement accounting

1)Registering the encashing dividends in amount of 7.000 lei from an entity atwhich investment papers are held:

461sundry debtors=762incomes from short term financial investments 7.000

2)Debits reactivation in amount of 56.000 lei

461sundry debtors=754 incomes from reactivated receivables 56.000

and sundry debtors

3)A discount gave to a debtor in value of 750 lei

667discounts granted expenses=461sundry debtors 750

4)Investments papers are acquired in amount of 4.000 lei with later payment

503shares=462sundry creditors 750

Diverse creditors and debtorsreimbursement accounting

5) At the end of financial year N it is recorded an unfavorable difference ofexchange rate of 850 lei, from a foreign currency debt:

665foreighn exchange losses=462 sundry creditors 850

6)Receivables for concessions, rents, management locations, and other similarrights in amount of 50.000 lei are recorded

461sundry debtors=706rental and royalty incomes 50.0007) Sated debtors, withdrawn from the evidence in amount of 300 lei are

recorded:

654bad debts written off=461sundty debtors 300

8) payment of debts to creditors in amount of 400 lei is recorded:

462sundry creditors=5121cash at bank 400


46/49

46

The independence incidence of financialperiod over accounting reimbursements

The principle of financial periods independence imposes the building ofsome reimbursement accounts between the successive financial periods.More than that, during the period, but especially at the end of it, someeconomic operations which should be temporary reflected in the entitysaccounting appear and who, later on, have to be annulled or recorded inother accounts. Such operations are called regularizations.

The main regularization operations are:

- The delimitation of the incomes and expenses from next financial periodfrom the ones from the current financial period;

- The separation of the receivables and debts that need accessory research

47 regularization accounts and assimilated ones

471 472 473

The independence incidence of financialperiod over accounting reimbursements

In current financial period, the amount of 30.000 lei is paid through banktransfer, representing the subscription to specialized papers for the nextfinancial period. (the editor is also a commercial entity)

Subscribers accounting Editors accounting

Financial period N

1) Paying the subscription:

471 = 5121 30.000

Financial period N

1) Encashing the subscription:

5121 = 472 30.000

Financial period N+1

2)Including the subscription incurrent expenses

6558 = 471 30.000

Financial period N+1

2)Including the subscription incurrent incomes

472 = 702 30.000


47/49


48/49

48

The accounting of reimbursementswithin the entity

An entity X, transfers to subunit Y, with his own accounting until the checkingbalance sheet, spare parts in amount of 6.000 lei, whose accounting, atboth entities, is kept through permanent inventory.


481=3024 6.000 3024=481 6.000

The accounting of reimbursementswithin the entity

A entity X, transfers to subunit Y raw materials in amount of 50.000 lei, bothpatrimonial entities having their own accounting until the checking balancesheet, and practicing permanent inventory for stock evidence.


482=301 50.000 301=482 50.000


49/49

The accounting of adjustments forreceivables depreciation

Reversible value losses established at the end of the financial period whentheir accounting values is compared with their real (actual) valueestablished at the inventory, and for the found differences (when theaccounting value is bigger then the real one), adjustments for depreciationare constituted or the existing adjustments are brought to date.

The accounting of adjustments for receivables depreciation in recorded ingroup 49 adjustment for impairment of receivables, with the followingaccounts:

- 491 Adjustment for impairment of customers;

- 495 Adjustment for impairment of receivables from group companies andshareholders;

- 496 Adjustments for impairment of sundry debtors;

The accounting of adjustments forreceivables depreciation

Parent company gives to a affiliate a financial help in the amount of 100.000lei.

Because of the affiliates insolvency, the receivable is found in the possiblesituation of impossibility of encashing. Later on , the affiliates situation isupturned and the receivable is encashed. The reimbursements are madethrough bank transfer.

Solution:

1)Recording the gave loan:

4511 Intercompany reimbursements=5121 cash at bank 100.000

2)Recording the constitution of adjustment for receivables depreciation

6864 impairment losses = 495 Adjustments for impairment 100.000

on current assets of sundry debtors

3) Recording the encashing of the receivable:

5121 cash at bank = 4511 Intercompany reimbursements 100.000

4) Registering the annulment of the adjustment for depreciation:

FA C08-09 Liabilities (Suppliers, Salaries, Taxes)

Documents

Transcript of FA C08-09 Liabilities (Suppliers, Salaries, Taxes)